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LIAFI writes to IRDAI, seeks 35% first-year commission and 7.5% renewals for long-term life policies

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LIAFI writes to IRDAI, seeks 35% first-year commission and 7.5% renewals for long-term life policies

LIAFI writes to IRDAI, seeks 35% first-year commission and 7.5% renewals for long-term life policies

The agents’ body has proposed commission rates of up to 35% for policies with premium-paying terms of 15 years and above, opposed clawbacks on alleged mis-selling and sought equal scrutiny of banks and other distribution channels.

The Life Insurance Agents ’ Federation of India-1964 ( LIAFI ) has written to the Insurance Regulatory and Development Authority of India ( IRDAI ), seeking a higher commission structure for individual insurance agents as the regulator considers sweeping reforms to insurance distribution, including changes to commissions and safeguards against mis-selling. In its October 15 letter to the IRDAI chairman, LIAFI proposed first-year commissions of 27% for policies with premium-paying terms of five to nine years, 30% for terms of 10–14 years and 35% for policies with terms of 15 years and above. It has also sought renewal commissions of 7.5% from the second to the sixth year and 6% from the seventh year until policy maturity. Advt

The federation said the proposed structure should recognise agents’ long-term servicing responsibilities and rising business costs, while ensuring that individual agents remain financially viable. It also urged the regulator to protect agents’ livelihoods and ensure that distribution reforms do not weaken the agency network that serves rural, semi-urban and underserved markets. “The national objective of ‘Insurance for All’ cannot be achieved without a strong, experienced and financially sustainable agency force capable of reaching customers personally, explaining insurance products and providing continuous assistance throughout the policy term,” LIAFI said in its letter.


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